Discussion question and peer review
DISCUSSION POST MUST BE 10+ SENTENCES AND PEER REVIEWS MUST BE 7+ SENTENCES STAY ON TOPIC BE POSITIVE AND DO NO NOT COMMENT ON GRAMMAR ERRORS ( WHEN DOING PEER REVIEWS YOU MUST TALK DIRECTLY TO THE CLASSMATE)
1) DISCUSSION POST
Welcome to Week 9.
Please find important link with information on Introduction to Working Capital Management.
- Yellowdig: Discussion to be completed in Yellowdig: Discussion (25 points)
This week’s pin for discussion is Managing Working Capital.
Why don’t you be the first one to pin something awesome?
Post a Pin that relates to the topics covered this week and write why you chose this item. A Pin can be a link to a video or article that you found on the web. Click here to view a quick tutorial on how to get started. After you post your Pin, make sure you check back to comment on your fellow classmates Pins.
DIRECTIONS: To get started, click on the +Pin option on the upper right hand corner and write your response. Click on “How Points Work” to see how you can earn your points. Once you reach 100% you will earn your full 25 points in Blackboard. Please note that points can be deducted if the post is not high quality.
2) PEER REVIEW
I found this article very interesting. It discusses some of the minutia around “working capital”. “Working capital is often misunderstood for cash.” Also defines it as such, “The number of days difference between when you pay for things and when you get paid.” This was a very informative article when you are attempting to navigate the finance world. It also touches on cash flow, measure-ability of working capital, and financing. Working capital is an ability to procure cash in a quick fashion. This money should be used to manage the business cash flow. I would highly recommend this article. The comments section had some more interesting information as well, please take a look at these if you have time. Hope this helps someone!
Although the phrase “working capital” is common in business and finance circles, it is often very misunderstood. Here’s an example: if I was to ask you if you would rather own a business with a lot of working capital instead of a little working capital, what would be your answer? Most people would prefer the business with a lot of working capital. But the answer is not that simple, and, in many cases, smaller working capital actually indicates better management and cash flow generation. I will take a few paragraphs to discuss the two main reasons why working capital is misunderstood and then discuss the best measurement tool I know to monitor it.
3) PEER REVIEW
Working Capital Management
Working capital is formally arrived at by subtracting the current liabilities from current assets of a firm on the day the balance sheet is drawn up. Working capital is also represented by a firms net investment in current assets necessary to support its everyday business. Working capital frequently changes its form and is sometimes also referred to as circulating capital.Working capital, as mentioned above, can take different forms. For example, it can take the form of cash and then change to inventories and/or receivables and back to cash.
- Gross and Net Working Capital: The total of current assets is known as gross working capital whereas the difference between the current assets and current liabilities is known as the net working capital.